I'm a San Francisco-based Assistant Managing Editor with a focus on wealth. I edit mostly, but also write about how the richest get wealthy and how they spend their time and their money. My colleague Luisa Kroll at Forbes in New York and I oversee the massive reporting effort that goes into Forbes' annual World's Billionaires List and the Forbes 400 Richest Americans list. The former gets me to use my rusty Spanish and Portuguese. In 2014, I won an Overseas Press Club award for an article I wrote about Saudi Arabian billionaire investor Prince Alwaleed bin Talal; I also won a Gerald Loeb Award with co-author Rafael Marques de Morais for an article we wrote about Isabel dos Santos, the eldest daughter of Angola's President. Over 20 years my Forbes reporting has taken me to 17 countries on four continents, from the slums of Manila to palaces in Saudi Arabia and Mexico's presidential residence. Follow me on Twitter @KerryDolan My email: kdolan[at]forbes[dot] com Tips and story ideas welcome.

Starbucks' Howard Schultz Wants To Redefine The Role of Business In Society

Starbucks founder Howard Schultz is trying hard to come up with a solution for America’s ills. His latest suggestion: transform the role that businesses play in society. In a blog post today for the Harvard Business Review entitled “Invest in Communities to Advance Capitalism,” Schultz calls on private and public companies to change their ways. Schultz explains:

It is no longer enough to serve customers, employees, and shareholders. As corporate citizens of the world, it is our responsibility — our duty — to serve the communities where we do business by helping to improve, for example, the quality of citizens’ education, employment, health care, safety, and overall daily life, plus future prospects.

In essence, Schultz is asking companies to take over the role long played by the government. This, at a time when the economy is weak and many businesses are struggling. To Schultz’s credit, he’s leading by example—even it’s a limited example. Starbucks stores in parts of Harlem in New York City and in the Crenshaw area of Los Angeles will be creating training opportunities in partnership with organizations like the Abyssinian Development Corp. and the Los Angeles Urban League. (Starbucks announced this program on Oct. 4 and will be donating a minimum of $100,000 to each organization in the first year of the partnership.)

The Starbucks Foundation is also partnering with a nonprofit community development group called Opportunity Finance to lend money to small businesses, with the aim of creating jobs. In his blog post, Schultz asks Starbucks customers to donate to the fund, promising that 100% of the money will go to lending to small businesses (and customers get a bracelet for donating $5).

Schultz, who ranked 331st on the Forbes 400 list of the richest Americans with a net worth of $1.3 billion, attracted attention in early September with full page ads in the New York Times and USA Today. In the ads, he called on Americans to be catalysts for change adding: “Waiting for Washington to act is not a plan of action.” The ads announced a nationwide town hall meeting on Sept. 6 to discuss the future of the U.S. At the website Upward Spiral, Schultz asks Americans to pledge to withhold campaign contributions to members of Congress and the President “until a fair, bipartisan deal is reached that sets our nation on stronger long term fiscal footing.” So far, nearly 23,000 people have taken the pledge.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

It is great to see that approach from Starbucks Foundation. Hope the others will also continue the same way and will start contributions to the community. All above efforts show us that business needs to be re-modelled and we have to bring a new discussion topic to the board meetings as contribution to the community.. If your community will not improve their way of living, you will not be able to improve your business… Dr. Fatih Mehmet GUL Founding Director CSR Middle East

A couple of weeks ago NY TImes columnist David Brooks wrote a pretty decent piece about the frozen positions in American politics and said “There are six or seven big institutions that are fundamentally diseased, from government to banking to housing to entitlements and the tax code.” He should have included the U.S. Chamber of Commerce and the Business Roundtable — they take the narrowest views of economic policy, playing to the lowest common denominator of their memberships. Good to see Starbucks taking a bigger view, but it highlights the failure of other business leaders.

My take is that only very large, successful companies like Starbucks and Salesforce.com (and lots of other large U.S. corporations with in-house foundations, the GEs and the Microsofts of the world) have the luxury of being able to divert any attention at all away from running the business. Competition is so fierce that surviving, growing and achieving profitability take every bit of bandwidth for most businesses. I could be wrong, though. I’d love to hear if there are examples of small and medium-sized businesses that are able to look beyond the walls of their company and tackle some of the problems that Howard Schultz wants to go after –and live to tell the tale 5 or 10 years later.

It’s a familiar story line: smart, motivated entrepreneur starts a business and builds it into a rousing success. After some time passes, his fortune made, he decides he wants a legacy that reaches beyond business success (as if that isn’t enough, given the thousands of jobs and billions in tax dollars he’s responsible for). He wants to be remembered for a grander purpose, for giving back. Sorry, but Schultz’s responsibility, at least as far as Starbucks goes, is to his shareholders. The company has no place taking on responsibility for anyone’s education, health care or quality of life. The company exists to sell coffee and make money, not cater to Howard Schultz’s ego.

I see your point, Tom. But what’s the harm in Starbucks partnering with a couple of community development organizations –and kicking in some money, as well –to try and foster job training programs? As long as Starbucks’ management keeps its eye on serving coffee and making sure the corporation is humming (or growing), the Starbucks Foundation can afford to spend some of its time and capital trying to help fix social problems and train future responsible, productive Americans. Seems to me our country could use all the help it can get.

Sir, a name more fitting for you would be Tom ‘the Ripper’. Your comments are spoiled, beyond Ripe. If we all took your attitude the world would be ugly with arrogance and inconsideration as is your comment; a dark place of little hope and compassion for fellow man. Good luck to you and may everyone in your life care about you. ;) I appreciate hope and good will, even for you sir. Way to go Starbucks, set the bar and lets keep it moving. P.S. I got it Ripe! You are joking… an educated man contributing an opposing view for the sake of argument. I get it. Peace brother.

Sir, a name more fitting for you would be Tom ‘the Ripper’. Your comments are spoiled, beyond Ripe-r. If we all took your attitude the world would be ugly with arrogance and inconsideration as is your comment; a dark place of little hope and compassion for fellow man. Good luck to you and may everyone in your life care about you. ;) I appreciate hope and good will, even for you sir. Way to go Starbucks, set the bar and lets keep it moving. P.S. I got it Ripe! You are joking… an educated man contributing an opposing view for the sake of argument. I get it. Peace brother.

I agree that we cannot wait for the government to do something; if you matter to the government you already have a job and don’t need one, and if you are an advocate for the unemployed, you vote only vote democrat, what are you going to do if they don’t deliver, vote republican or independant?

This added to the fact they dont know how to make jobs in the US.

Businesses should hire more, but in order to do so they need both more demand to justify the expense of employees, and they have to take thier HR function seriously. Stop telling taleo to look for a guy with 10 years experience, an MBA and a hard to get certification for an entry level data entry person/receptionist at $10.00 an hour. No wonder you can’t find anybody.

Solving problems and making way for new innovations is essentially the role of a true entrepreneur. Cities should sell their problems to entrepreneurs and you’ll see how fast and efficiently they get solved. I’m behind Mr.schultz 100%.

An excecutive who has a net worth of over one billion dollars must surely have a tremendous moral pressure if he compares his fortune to that of his Starbuck´s fellow workers. The way he shared the product of their common effort is the root of capitalism´s failure to distribute wealth in a moral and efficient manner. The only possible change is to improve wealth distribution among those who participate in its creation. If they did so, workers would have more to spend and factories more to produce. Useless to say this is an obvious simplification of a very complex problem, however its simple truth stands like the Washinton monument. His initiative seems to me like setting up a nursery-tent after a battle to patch up some minor wounds with band-aid.

Well, it’s about time someone in the commercial sector snapped to this obvious factor implicit in the privatization of governmental services. The Republicans, ever critical of the government’s inefficiencies, claims that the private sector can do better, and perhaps now’s the time to prove it. However, I have serious reservations, mainly because the government is often bound to operate according to principles of fairness to the largest number of people possible–while business only considers fairness if it increases profit. I’m not about to suppose for a moment that businesses are going to sacrifice their all-important value of efficiency for something as “superfluous” as fairness, but if the neo-liberals and Libertarians want to take over important duties from the government, they’re going to have to do a couple of things. First of all, they’re going to have to realize that the monetary pool they’re going to be drawing from is going to be smaller, and hence are going to have to sacrifice profit for fairness–unless, of course, they think they can get away with passing-off the costs of their largess to their consumer base. And second, because fairness is actually important in providing services that don’t turn a profit, businesses are going to have to sacrifice efficiency.

All said and done, when the commercial sector decides to take-on government-provided services, it’s going to be in the same boat as the government is in right now.